8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 5, 2007

ACCELLENT INC.

(Exact name of registrant as specified in its charter)

Maryland	333-130470	84-1507827
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

100 Fordham Road Wilmington, Massachusetts	01887
(Address of principal executive offices)	(Zip Code)

(978) 570-6900

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o                 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o                 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o                 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o                 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02                      Results of Operations and Financial Condition.

On November 5, 2007, Accellent Inc. (the “Company”) issued a press release announcing the results of the Company’s financial results for the quarter ended September 30, 2007. The press release is furnished as Exhibit 99.1 to this current report and is incorporated by reference in this Item 2.02.

As provided in General Instruction B.2 of Form 8-K, the information and exhibits contained in this Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01                      Financial Statements and Exhibits.

(d)           Exhibits

Exhibit No.                                Description

99.1 Press release, dated November 5, 2007, announcing third quarter 2007 financial results (this exhibit is furnished and not filed)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  November 5, 2007	ACCELLENT INC.
	By:	/s/ Jeremy A. Friedman
		Name:  Jeremy A. Friedman Title:    Chief Financial Officer

EXHIBIT INDEX

Exhibit No.                                Description

99.1 Press release, dated November 5, 2007, announcing Third quarter 2007 financial results (this exhibit is furnished and not filed)

EX-99.1

Investor Contact: Jeremy Friedman                     

Executive Vice President and Chief Financial Officer

(978) 570-6879

jeremy.friedman@accellent.com

For Immediate Release

Accellent Inc. Announces Third Quarter 2007 Financial Results

Wilmington, MA. (November 5, 2007)– Accellent Inc. (the “Company”), a wholly owned subsidiary of Accellent Holdings Corp. (“Accellent”), announced results for the three and nine months ended September 30, 2007.

Third Quarter 2007 Financial Results

Net sales decreased 0.4% to $119.4 million in the third quarter of 2007 compared with $119.9 million in the corresponding period of 2006.  Sales were approximately the same as last year for each of Accellent’s target markets.  Sales were negatively impacted 0.7% due to the previously disclosed ramp down of a specific product line. Sales improved 0.3% during the third quarter of 2007 compared to the second quarter of 2007.

A net loss of $8.1 million was recorded in the third quarter of 2007 compared with a net loss of $6.5 million in the corresponding period of 2006.  The decrease in net income was primarily attributable to lower gross margins caused by lower prices, a less favorable product mix and higher manufacturing costs.  The 2007 net loss includes a non-cash credit for employee stock-based compensation of $0.2 million compared to a non-cash credit for employee stock-based compensation of $0.9 million in the same period of 2006. The net loss in the third quarter of 2006 included a charge for non-cash loss on interest rate hedging instruments of $4.3 million and a restructuring charge of $1.2 million.

Adjusted EBITDA for the three months ended September 30, 2007 was $21.0 million or 17.6% of sales compared to Adjusted EBITDA of $25.7 million or 21.5% of sales in the corresponding period of 2006.  Adjusted EBITDA declined due to the same factors impacting our gross margins.

Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in the financial statements accompanying this press release.

Nine Months ended September 30, 2007 Financial Results

Net sales decreased 4.5% to $350.0 million in the first nine months of 2007 compared with $366.3 million in the corresponding period of 2006.  Sales were negatively impacted approximately 3.0% due to the previously disclosed ramp-down of a specific product line and approximately 2.7% due to orthopaedic end-market conditions.

A net loss of $98.0 million was recorded in the first nine months of 2007 compared to a net loss of $10.9 million in the corresponding period of 2006.  The 2007 net loss includes a non-cash charge for impairment of goodwill and other intangible assets of $82.3 million incurred as a result of reduced growth expectations in the orthopaedic business and $1.5 million of non-employee stock-based compensation.  These non-cash charges were partially offset by a credit for employee stock-based compensation of $4.9 million and a $1.3 million deferred tax credit recorded in connection with our impairment charge.  Net loss for the 2006 period included non-cash inventory step-up charges of $6.4 million related to the 2005 acquisition of the Company by Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and Bain Capital (“Bain”), restructuring charges of $3.5 million, a $1.8 million gain on derivative instruments and employee stock-based compensation charges of $2.3 million.

Adjusted EBITDA for the first nine months of 2007 was $64.2 million or 18.3% of sales compared to Adjusted EBITDA of $79.9 million or 21.8% of sales in the corresponding period of 2006.  Adjusted EBITDA declined due to lower sales volume, lower selling prices, less profitable sales mix and higher manufacturing costs, partially offset by lower selling, general and administrative expenses.

Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in the financial statements accompanying this press release.

Conference Call

Ken Freeman, Executive Chairman, Robert Kirby, President and Chief Executive Officer and Jeremy Friedman Executive Vice President and Chief Financial Officer, will discuss third quarter results in a conference call scheduled for today, November 5, 2007 at 5:00 p.m. Eastern Standard Time.  The teleconference can be accessed live on the Internet through the Investor Relations section of the Accellent website at www.accellent.com or by calling (800) 638-5495 pass code 36339544.   Please visit the website or dial in 10 to 15 minutes prior to the beginning of the call to download and install any necessary audio software.  A replay of the conference call will be available via www.accellent.com or by telephone at (888) 286-8010 pass code 25971119.

About Accellent

Accellent Inc. provides fully integrated outsourced manufacturing and engineering services to the medical device industry in the cardiology, endoscopy and orthopaedic markets.  Accellent has broad capabilities in design & engineering services, precision component fabrication, finished device assembly and complete supply chain management.  These capabilities enhance customers’ speed to market and return on investment by allowing them to refocus internal resources more efficiently.   For more information, please visit www.accellent.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended.  All statements included herein, other than statements of historical fact, may constitute forward-looking statements.  Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.  Important factors that could cause actual results to differ materially from the Company’s expectations are disclosed in the risk factors contained in the Company’s Form 10-K for the year ended December 31, 2006 filed with the Securities and Exchange Commission on March 13, 2007.  All forward-looking statements are expressly qualified in their entirety by such factors.

Accellent Inc.

Condensed Consolidated Statements of Operations

(in thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Net sales	$	119,396		$	119,915		$	349,961		$	366,323
Cost of sales		89,904			84,156			259,007			259,701
Gross profit		29,492			35,759			90,954			106,622
Selling, general & administrative expenses		14,395			13,420			38,622			46,678
Research & development expenses		582			947			1,933			2,819
Restructuring (benefit) charges		(7	)		1,154			701			3,452
Amortization of intangibles		3,735			4,301			11,771			12,904
Impairment of goodwill and other intangible assets		--			--			82,340			--
Income (loss) from operations		10,787			15,937			(44,413	)		40,769
Interest expense, net		(17,165	)		(16,692	)		(50,079	)		(48,764	)
(Loss) gain on derivative instruments		(122	)		(4,260	)		(64	)		1,840
Other expense		(420	)		(163	)		(515	)		(584	)
Loss before income taxes		(6,920	)		(5,178	)		(95,071	)		(6,739	)
Income tax expense		1,212			1,279			2,897			4,144
Net loss	$	(8,132	)	$	(6,457	)	$	(97,968	)	$	(10,883	)

Accellent Inc.

Reconciliation of Net Loss to EBITDA to Adjusted EBITDA

(in thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Net loss	$	(8,132	)	$	(6,457	)	$	(97,968	)	$	(10,883	)
Income tax expense		1,212			1,279			2,897			4,144
Interest expense, net		17,165			16,692			50,079			48,764
Depr. and amortization		8,802			8,642			26,537			25,295
EBITDA (1)	$	19,047		$	20,156		$	(18,455	)	$	67,320
Impairment of goodwill and other intangibles		--			--			82,340			--
Restructuring charges		(7	)		1,154			701			3,452
Employee stock-based compensation		(151	)		(928	)		(4,912	)		2,332
Inventory step-up		--			--			--			6,422
Loss (gain) on derivative instruments		122			4,260			64			(1,840	)
Non-employee stock-based compensation		480			--			1,521			--
Other		1,521			1,087			2,911			2,240
Adjusted EBITDA (1)	$	21,012		$	25,729		$	64,170		$	79,926

 (1) EBITDA and Adjusted EBITDA presented in this press release are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP.  EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity.

EBITDA represents net income (loss) before net interest expense, income tax expense, depreciation and amortization.  Adjusted EBITDA is defined as EBITDA further adjusted to give effect to unusual items, non-cash items, the pro forma effect of acquisitions as if they had taken place at the beginning of the periods covered by the covenant calculation and other adjustments, all of which are required in calculating covenant ratios and compliance under the indenture governing our senior subordinated notes and under our senior secured credit facility. For the periods presented, Adjusted EBITDA includes adjustments for: restructuring and other related charges, impairment of goodwill and other intangible assets, gains and losses from derivative instruments, gain on sale of property, non-operating currency transaction losses, certain stock compensation related charges, severance, write-off of inventory step-up, executive relocation, CEO search costs, non-cash consulting expenses and management fees.

We believe that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information to investors about the calculation of certain financial covenants in the indenture governing our senior subordinated notes and under our senior secured credit facility.  Adjusted EBITDA is a material component of these covenants.  We also present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of high yield issuers, many of which present EBITDA when reporting their results.

Accellent Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

	September 30, 2007		December 31, 2006
Assets
Current assets
Cash and cash equivalents	$	4,574	$	2,746
Accounts receivable, net		52,498		49,994
Inventories		68,957		57,962
Prepaid expenses and other		3,569		4,169
Total current assets		129,598		114,871
Property and equipment, net		133,250		128,573
Goodwill		798,827		847,213
Intangibles, net		213,179		258,904
Deferred financing costs and other assets		21,953		24,033
Total assets	$	1,296,807	$	1,373,594
Liabilities and stockholder’s equity
Current liabilities
Current portion of long-term debt	$	4,008	$	4,014
Accounts payable		25,341		20,338
Accrued expenses		39,006		27,262
Total current liabilities		68,355		51,614
Notes payable and long-term debt		704,889		696,515
Other long-term liabilities		34,361		39,205
Total liabilities		807,605		787,334
Total Stockholder’s equity		489,202		586,260
Total liabilities and stockholder’s equity	$	1,296,807	$	1,373,594

Accellent Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Nine months ended September 30,
	2007			2006
Net cash provided by operating activities	$	13,851		$	24,185
Cash flows from investing activities:
Purchase of property and equipment		(18,673	)		(24,881	)
Other		122			456
Net cash flows used in investing activities		(18,551	)		(24,425	)
Cash flows from financing activities:
Proceeds from debt		44,000			28,000
Principal payments on debt		(36,011	)		(31,063	)
Deferred financing fees		(1,657	)		(1,417	)
Other		--			(158	)
Net cash flows provided by (used in) financing activities		6,332			(4,638	)
Effect of exchange rate changes in cash		196			90
Net increase (decrease) in cash		1,828			(4,788	)
Cash at beginning of year		2,746			8,669
Cash at end of period	$	4,574		$	3,881